Although Mr. Mencia acknowledges he’s taking a chance by creating a top-heavy company in the government sector, The Cube Corp. has expanded its senior staff in anticipation of securing large contracts. “We are prepared today for growth,” he says. “And we’re prepared because we brought in the right people and have the right systems in place.”
Because a service company lives or dies on the skill level of its employees, Cube pays attention to its work force. It has about 1,100 workers across the country, including pipe fitters, electricians, plumbers, carpenters, security guards, janitors, and landscapers. Some employees are subcontractors. About 10 percent of the company’s overall budget goes to employee training, and the company has 21 collective bargaining agreements with unions. Whenever the company assumes a new contract, it recognizes the monetary terms of the existing union contract, then tries to negotiate the non-economic clauses to bring them into compliance with its established practices and management style. Good-faith bargaining also has helped the company avoid strikes. Cube likely faces additional operational costs, however, because the government is tightening the screening process for employees and contractors
Cube competes in a market dominated by large corporations such as Johnson Controls, DynCorp, Raytheon, and Brown & Root. According to Gary Engebretson, executive director at the Contract Services Association of America, only 127 of the 69,000 government service contractors have revenues of more than $150 million. To join that elite group, Cube needs to grow quickly to keep up with the demands of a downsizing, outsourcing federal bureaucracy. “It is a growing industry, and in my judgment it will continue to grow,” comments Mr. Engebretson.
EOY judges rated The Cube Corp. above average or superior for company mission statement, financial performance, identification of competition, solutions to recent business problems, marketing, company benefit package, employee training, and plans for incorporating technology and e-commerce.
Mr. Mencia was exposed early to the concept of money management. He was born in Miami to Cuban exile parents. His mother held a doctorate degree, his father was a lawyer, and his great-great-grandfather, Jose Miguel Gomez, was president of Cuba. In the early 1960s, the Mencia family moved to Falls Church, Virginia, where Mr. Mencia’s father died of lung cancer in 1966. His mother landed a job at the Organization of American States, but the family struggled financially.
After graduating from George Mason University in 1984 with a bachelor’s degree in finance, Mr. Mencia joined American Operations Corp., where he worked as a financial analyst. The operation was sold to Global Associates, a West Coast firm, in 1990. But in early 1992, Mr. Mencia and two of his coworkers bought the company. He says their plan was to do consulting work for businesses seeking contracts for facilities management, while using the company’s profits to bid on its own contracts. Frustrated that his partners did not share his vision for rapid corporate growth, however, Mr. Mencia decided to form his own business in 1994.
Mr. Mencia says that he was bitten by the entrepreneurial bug years earlier, when he tried to establish a small computer services company and failed. “I learned some important lessons from that failure,” he says. The most important lesson was the need for an entrepreneur to maintain controlling ownership.
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